karmaguy

ETF Opinion: Extreme Bearishness Will Tell You When to Buy Again

Gary, You may be playing a dangerous game of chance. By your own submission the Put/Call ratio as measured by the last 5 years of data has been recently hitting new all time highs. So, where's your buy-in point now? When it hits 1.00?? Let's say the S&P is trading at 1260 (March lows) at a reading of 1.00. Are you going to buy? But if the Ratio expands to 1.35 or say a new record of 1.45 then where do you think the S&P will be then. I'll tell you, 900!! Are you prepared to tell people to buy at 1.00 and then face that kind of potential loss? I think not! So what do you do? Buy some stocks when the Ratio hits 1.00, buy more at 1.10, more at 1.20, more at 1.30 and even more at 1.40? I think not! That would be like all those out there that have been trying to guess the bottom on the Financials.